India’s services growth moderates in February as cost pressures mount, PMI shows
The country’s new-business expansion is at the slowest pace since January 2025 due to intensifying competition among service providers
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[BENGALURU] The growth of India’s services sector slowed in February, as new business rose at the slowest pace in over a year and companies faced the steepest cost pressures in 2½ years, a survey showed.
The HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 58.1 in February from January’s 58.4, and undershot a preliminary estimate of 58.4.
The benchmark of 50 separates growth from contraction.
New business – a key gauge of demand – expanded at the slowest pace since January 2025, held back by intensifying competition among service providers despite an increase in marketing campaigns.
However, international sales provided a bright spot, rising at the fastest pace since August – as companies reported higher demand from abroad.
Service providers faced a sharper increase in operating expenses, driven primarily by higher food costs along with energy and labour.
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India’s maiden inflation reading under a revised data series showed an acceleration to 2.75 per cent in January, returning within the central bank’s target band of 2 to 6 per cent for the first time in five months.
The new series seeks to capture changing consumption patterns, with an adjusted weighting for components such as food and housing, and an updated base year of 2024.
Companies passed on much of the cost burden to customers, pushing output prices up at the fastest pace in six months.
Employment grew for a second month, with hiring accelerating from January as businesses prepared to meet their current and future operational needs.
The outlook brightened, with business confidence jumping to a one-year high as companies expected increased demand and anticipated benefits from marketing initiatives.
The overall composite PMI, which combines manufacturing and services activity, rose to 58.9 in February from 58.4 – marking the fastest pace of private-sector growth in three months. REUTERS
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